Brock Online Notes

U.S. soybean farmers on Friday blamed strict European Union labeling and traceability regulations on genetically modified foods for a “steep decline" in sales of U.S. soybeans to the EU and charged the regime violates world trade rules.

The EU legislation is responsible for shaving "around 1 million tons" off annual U.S. soybean exports to the EU, according to Kimball Nill, Technical Director of the American Soybean Association told Reuters News Service.

The U.S. has long complained about E.U. restrictions on such products and has already launched a complaint against the EU's approval regime at the World Trade Organization.

Since 1996 the U.S. has been growing and exporting biotech soybeans to Europe, but last April the E.U. started requiring the U.S. to label these products as genetically modified.

According to the ASA, since the rules came into effect, more than 100 European food companies, including giants Nestle S.A. and Unilever N.V., have started sourcing soybeans from other countries, such as Brazil, where GM-free varieties are grown. Around 93% of the U.S. soybean crop is genetically modified.

The EU's requirements are "unfair" and "contravene" WTO rules, Nill told Reuters. They act as an illegal barrier to trade as they place unreasonable requirements on exporters and importers, he said.

The E.U. Commission says it is confident that the labeling laws are in line with WTO rules.

Editors note: Richard Brock, The Corn and Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.